Your small company would like to implement a qualified small employer health reimbursement arrangement (QSEHRA) for the 2018 plan year. Many of your employees are part-time. Do you have to offer the QSEHRA to the part-time employees?

Answer:

No.The21st Century Cures Act allows eligible employers to use QSEHRAs without penalties related to the Patient Protection and Affordable Care Act (ACA). An eligible employer must have fewer than 50 full-time employees and must not offer a group health plan to any of its employees.

The law specifies that QSEHRAs must be provided to all eligible employees, but employers have some leeway to restrict eligibility. Employers may exclude: part-time and seasonal employees; certain employees subject to a collective bargaining agreement; employees with less than 90 service days; employees younger than 25; and certain nonresident aliens.

QSEHRAs must be funded solely by an eligible employer, and there can be no employee contributions of any kind, including salary reduction contributions. The QSEHRA must provide for the payment of, or reimbursement of, an eligible employee for expenses for medical care incurred by the eligible employee or the eligible employee’s family members (as determined under the terms of the arrangement). Also, the amounts of payments and reimbursements for any year cannot exceed $4,950 for single coverage ($10,000 for family coverage). These amounts are adjusted for inflation.

Source:21st Century Cures Act (P.L. 114-255), signed by the president on December 13, 2016; reported in Employee Benefits Management Newsletter, Issue 636, June 20, 2017.